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Rising gas prices boost inflation, retail sales

Posted at 10:29 AM, Sep 14, 2012
and last updated 2012-09-14 10:29:36-04

By Annalyn Censky, CNNMoney

NEW YORK (CNNMoney) – Rising gas prices pushed both inflation and retail sales higher in August, two government reports showed Friday.

The Consumer Price Index, which measures a broad basket of consumer goods, showed prices rose 0.6% in August. It marks the sharpest one month rise in inflation since June 2009, according to the Bureau of Labor Statistics.

Gas prices accounted for most of the change, rising 9% during the month. A gallon of unleaded gas started at a national average of $3.50 in August, but ended the month at $3.83, according to AAA.

So-called core CPI, which strips out volatile gas and food prices, remained tame, rising only 0.1% in August.

The CPI is up 1.7% from a year ago and core CPI is up 1.9%. The Federal Reserve aims to keep inflation around 2% a year.

A separate report also released Friday showed retail sales picked up 0.9% in August.

But the numbers are not adjusted for inflation, and the biggest increase came from gasoline stations, which saw sales rise 5.5% during the month.

Auto sales also rose, as did sales of building materials — an encouraging sign that the housing sector may be recovering.

Sales fell 1.4% at electronics and appliance stores.